Continuing its aggressive crack down in the crypto space, the Securities and Exchange Commission filed yet another civil enforcement action involving the promotion and sale of a global unregistered digital asset securities offering that raised in excess of $2 billion from the investing public.
The SEC’s lawsuit alleges that from around January 2017 to January 2018, BitConnect utilized a network of sales promoters to solicit and sell securities in its “lending program.” However, the securities were not registered with the SEC, and the promoters were not registered as broker-dealers, which was in violation of the federal securities laws the SEC contended in its enforcement action.
The promoters touted BitConnect’s lending program to retail investors through “testimonial” videos on YouTube, and were paid commissions based on their raise of investor monies, per the SEC’s Complaint.
Notably, the SEC charged the promoters only with violations of the registration provisions of the federal securities laws, and one particular promoter with aiding and abetting BitConnect’s unregistered securities offering – not fraud. However, the SEC’s investigation is ongoing and, as mentioned in its press release, it involves cooperation between amongst certain European, Caribbean and Asian securities regulatory authorities. Given this, there may be yet more to come.
David Chase, Esq. is an SEC defense attorney, former Senior Counsel with the SEC’s Division of Enforcement and an Adjunct Professor of Law at the University of Miami School of Law where he teaches SEC Regulation. His SEC defense law firm, based in South Florida, represents nationwide those under SEC investigation and prosecution. Mr. Chase may be contacted toll-free at: 800-760-0912, or email at firstname.lastname@example.org. Firm website: securitiesfrauddefense.net.